For those who follow the motto of Groucho Marx and refuse to join clubs that want you as a member, a new form of ultra-exclusivity might suit you just fine.Despite what users claim, Bitcoin is the new back alley club of finance with one hellava confusing address. And this group of new exclusives wear nerd glasses and pocket protectors. With their mining pools, hash rates, USB ASICs, and digital signatures these nerds have their computers yoked up and digging for geek gold. And while it feels like monopoly money to many, a number of bitcoin nerds have already become filthy rich. As this confusing currency is making a play to unseat gold or even the dollar. But don't get caught by surprise. Nerd domination is nothing new. Even if we forget the recent history of nerd billionaires highlighted by Steve Jobs and Bill Gates, we don't have to dig too deep to find how nerds have commanded their fair share of history.In fact two of the most powerful families of all time were double ledger number crunching geeks. Much like bitcoiners today, the Rothschild and the Medici used secret codes and decentralized networks to amass some of the greatest fortunes in history.Indeed, the Medici were so rich, they personally funded a good chunk of the Renaissance. While the Rothschilds brought down Napoleon and dictated the outcomes of major wars.But while the Medici and Rothschild were comfortable with their greed, today's nerds are playing a different game. Modern geeks claim they are working with full transparency and using tools available to anyone. Tell them they are running an exclusive club and they'll scream Bitcoin is open source, anyone can mine, and the server is run by the masses. They ignore the fact the most of the world is not as tech savvy as they are and bitcoin is still years away from being as user friendly and accessible as they claim. Worse, they conveniently forget the billions of people in underdeveloped countries who don't have reliable internet or even electricity. They'll say bitcoin can function without phones or even computers, but that's like a bit like a jet-setter telling others that donkeys work just fine. Given such poor access, its believed that 80% or more of the world's population still hasn't even heard of bitcoin. Its a troubling situation given that this nerd mafia has already mined half of all future stocks. Ask these hoarding geeks what the rest of the world will use and they'll tear into you, claiming that the bitcoin protocol allows for infinite divisibility. There will always be enough.While true, this argument paints over the fact that a tenth of a Satoshi might work great in commerce but it holds one billionth of the value of each of their Bitcoins. Sure, a billion dollars and a penny are both liquid forms of currency but they do also define status & dictate powers.So beware, of this nerd frenzy and don't just wait until understanding is clear. Because, sadly, that may never happen. As the world catches up, the nerds are stocking up, creating an Ivory Tower of money. And if all goes to plan, global nerd domination will repeat itself once again. World power hand picked from the Usual Suspects...nerds.Still its not yet too late. If you want to join the party and you have trouble reading open-sourced code, perhaps we can recommend a new pair of glasses.For some, these specs are making the future look very bright indeed.

With the Forbes online article this week interviewing Rob McEwen, once again we are given a glimpse at Bitcoin's potential to unseat gold. The billionaire head of McEwen Mining and previous owner of Goldcorp conceded that "it's a mistake to write off bitcoin as a bubble or fad." And industry insider Naval Ravikant of AngelList goes further saying that "All the things that gold does, Bitcoin does better." Leading some to the conclusion that bitcoin is "gold on steroids." Indeed, Gold, the ancient currency was once prized for how easy it is to recognize and transport and how difficult it is to counterfeit. But in this global economy, the weight of gold is now its greatest burden. Gold is a nightmare to transport and impossible to send over the internet. While bitcoin has the very sci-fi aspect of brain storage, Bitcoins unlike any other money, can be stored just in your mind. Clearly helpful if you're crossing government borders. Further, modern counterfeiters have challenged the most pristine aspect of gold, with many recent forgeries being crafted with Tungsten, an element with nearly the same density as gold. In a recent case in New York, hundreds of thousand of dollars were lost to complex tungsten-based gold forgeries. Indeed, as Bitcoin appears entirely exempt from counterfeiting, its wider use could save billions in policing and loses from forgery.Bitcoin and Gold are often compared in terms of scarcity. Creating true deflationary currencies. But while new gold can always be pulled from the ground, Bitcoin has a hard limit of 21 million. And once reached no more will ever be produced. While its possible to subdivide each bitcoin into millions of units called Satoshi's to maintain its fluidity, even Satoshi's have a fixed and hard limit.With all this, it appears that gold might be running into the same pitfalls that newspapers and music companies felt when hit by digital online alternatives. It appears that with crypto-technology, for the first time in history, gold has finally met its match. When it comes to inflation, transport, trust, counterfeiting, and usability, Bitcoin stacks up pretty good against the precious metal.So... as gold prices tank in recent months, one can only wonder if Bitcoin's surge & Cyprus's troubles have anything to do with the fall. And others have suggested that as Bitcoin's price multiplies ever higher...bringing the masses into the fold, whether we are seeing the beginning of the world's first digital gold rush.

This piece was re-shot based on the original version "Bitcoin vs. Gold", 1 week ago. We re-shot and edited to fix some errata and include some updates.

This Papa John's pizza might look like an ordinary delivery, but it seems likely to go down in history as the most expensive food of all time. And the date it was purchased, May 22nd 2010 could well mark the first shot fired in a major revolution in the history of economics. This is because this pizza was bought for Bitcoins, and it is likely the first ever transaction ever made with the fledgling currency, which came to life in 2009. Further when programmer Laszlo Hanyecz ordered the pizza in Jacksonville Florida three years ago, he purchased it with 10,000 Bitcoins. At today's exchange rate of approximately 120 dollars to one bitcoin that amounts to a current day price for the pizza of 1 million 2 hundred thousand dollars. For historians, Laszlo's initial exchange can still be seen today on the bitcoin forum. He wrote:"I'll pay 10,000 Bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day. I like having left over pizza to nibble on later."It seems impossible to imagine these days, as prices for Bitcoins have multiplied in value over 50 thousand times. This was recently highlighted by the bitcoin purchase of a Porsche in Austin Texas. The price here, just 300 Bitcoins. Clearly, this leads us to a greater question. How far will the Bitcoins value soar. An answer that no one knows. Yet some pundits suggest that Bitcoins could swarm into the $60 trillion dollar international space for transactional currency. Indeed if bitcoin even grabs a 1% share of this market, its value can be calculated to climb to a phenomenal 100 thousand dollars per coin. At that point, the pizza would be worth exactly 1 billion dollars. Too much? Its not clear. Laszlo ate well that night, and launched the once abstract coin into the world for the first time as a currency.

With a tiny addition at the bottom of an obscure page on their website this week, eBay sent a swirl of excitement through the bitcoin community. By adding a section for virtual currencies, it seemed clear that eBay is making moves to embrace bitcoin. Immediately the bitcoin community went wild with activity, with many applauding eBay's move. But then, as quietly as the line was added it was removed.Had eBay changed its mind? Was it a hack?Its likely we will never know. But digging further reveals something even more elaborate. Around the same time, another page on eBay called DEALS released a well produced introductory bitcoin video. However, the 2 minute animation, is peculiar in its own right, almost like a two minute blurb of indecision, and it makes no comment whether eBay intends to go forward with bitcoins.Still, eBay is no newcomer to the bitcoin world. This past May, CEO, John Donahoe made numerous comments hinting that Ebay might even begin to accept bitcoin as a form of payment, a move that many bitcoiners view as a potential windfall. Yet just by selling bitcoins on its site, eBay becomes a massive free-market exchange, and as such, an easy entry point for many into the bitcoin world. With the legal framework in place to avoid the pitfalls of startups like TradeHill and Mt. Gox, Ebay's entry into bitcoin would likely be smooth.But, for eBay, the adoption of bitcoins presents one glaring problem. Ebay owns paypal. And bitcoin's acceptance could likely signal paypal's demise. So, if Ebay were to move forward with bitcoin, the auction giant would be sacrificing billions of dollars of paypal profits, a move they are likely not going to make any time soon. And though, you can still buy and sell bitcoins on the site today, at enormous markups with some obvious risks, its not clear that eBay is doing anything more than just flirting with the enemy.

In an overly sensationalistic piece yesterday, the New York Times reveled more about the level of NSAs commitment to prying into the lives of Americans. This time, though the Times news agency, long suspect on technical matters, fell for NSA's own leaked bragadoccio. In an internal document leaked by Snowden, the NSA claims to have cracked a number of forms of cryptography. But this is where anyone familiar with cryptography takes issue. Cryptographers, a very small population indeed, took to the airwaves to note the ridiculous errors of the Times piece.One wrote:"Nobody, not even the NSA can arbitrarily crack anything. Even if the NSA set every computer on the planet to work on brute-forcing an encrypted message, it would take millions of years." He goes further. "Instead, the NSA breaks in through less magical means, like demanding that data be handed over, stealing a key from a user, even having agents who physically pilfer data"This is confirmed in a much more nuanced piece by Wired.Wired states that the NSA cannot crack the algorithms that protect data, instead the Government organization relies on mobster-type tactics. They pressure vendors, steal passwords and bully.In fact both Wired and the Guardian covered the story without the confusion and fear mongering of the New York Times, with neither one suggesting that any modern cryptographic algorithms have been cracked.For Bitcoin users this news will come as a relief. Indeed, Bitcoin uses one of the most famous bits of cryptography, SHA. And SHA stands for Secure Hash Algorithm. It is not only still secure today, it seems likely to be secure for a few million more years. Still, ignoring the New York Times poor journalism, these new NSA revelations do matter. We now know that Big Brother is doing doing much more than just watching. As a result, we'll offer two words of advice for your bitcoins.Cold Storage.

In an unannounced change to HTML5, the engine that powers most major websites, there is now a tiny nod to bitcoin. For website developers "bitcoin" like "mailto" or basic http linking, is now accepted protocol.But this small step for bitcoin could be a major step for mankind. This is because bitcoin, and no other current system, can handle micropayments. So difficult has it been to send a couple pennies or less via the internet that is has often been called the holy grail of web finance. Sending such low amounts, seems petty, but when applied to something like a hit song, news article, blog comment or a video, it could add up to big money indeed. Micropayments not only provide content creators with important feedback but game-changing finance.But this move by the developers of HTML will also push the near-zero transaction costs of bitcoin even deeper into PayPal's home turf.Which could prove to be a nightmare for the financial giant, because bitcoin is adept not just at small payments, but at large. Further bitcoin can be received freely across borders even from those without bank accounts.And its not clear that PayPal has an answer. So as bitcoin explodes, riding an exponential adoption curve, there are rumors that PayPal might adopt the cybercurrency. But that's not happening any time soon. PayPal makes billions each year off their current price scheme, grabbing 2-5 percent off of every transaction. Bitcoin, on the other hand, offers to do a better job without charging anything. Indeed at bitcoin there are no CEOs or shareholders to gobble up profits and bonuses.While consumers save billions, PayPal is biting its nails and perhaps even lobbying congress. Wouldn't you?

When bitcoin was first born in 2009, the cyber-currency was expressly set up to avoid the pitfalls of a Federal Reserve or the pricey bailouts given to the failing banks. Bitcoin's novelty was based on the fact that it was entirely decentralized. But there's no question that an overarching, indeed, central player has emerged. And Mt Gox, the first major exchange of bitcoins is that entity. In fact it is near impossible to follow bitcoins without hearing about this Japanese based exchange.And while the relationship has long been rosy, 2013 has seen trouble in paradise for Mt Gox. Suddenly, the elephant in the room with respect to bitcoin success is the company's liquidity or possible shady dealings. Originally set up to exchange magic cards that can sell for as much as bitcoins, Mt Gox now is accused of selling nothing more than magic vapors.As Forbes' recent article suggests, bitcoin has become a Roach Motel for your dollars. They check in, but they don't check out.Online sources concur. Revealing no record of Mt Gox paying out in dollars to anyone. Some users have even posted rewards for any proof of US Dollar payouts without much success. So while it is easy to buy bitcoins from the exchange, even easy to send the bitcoins outside their system Mt Gox seems unwilling to sell them. Is it a question of liquidity, fraud or government regulation? It is not clear. But one thing is sure, Bitcoin has been the focus of a number of US Federal investigations in recent months, with nearly 5 million seized in perceived actions of money laundering. So how does this Magic firm stay in business? How does it still capture the majority of transactions? Well, Mt Gox sells bitcoins at the highest prices, often TEN to FIFTEEN dollars more than Bitstamp. Any amateur in arbitrage sees this difference as enormous potential, but when they are lured in, its over. Their cash is stuck.Today, most savvy investors avoid the Mt Gox entirely. And as questions swirl about their involvement in illegal arbitrage, potentially worth millions of dollars, the exchange has seen its numbers of transactions fall. Sure US regulators have pushed them around, but the bigger issues with Mt Gox are now about transparency and trust. Its high time the Roach Motel cleaned house.

As the average value of bitcoin for the week approaches new highs of 140 dollars, once again we are seeing a new round of Tulip comparisons sprouting on the net. And the concern is fair.In 1637 Holland's fancy colored tulips became all the rage, And in just a couple months, the price multiplied. At the height of this tulip mania, one tulip could be exchanged for two tuns of butter, four oxen, eight adult pigs or even a mug of silver. But on February 3rd 1637, the tulip market had an historic collapse.Many refer to this Tulip Mania as the first economic bubble, and as such, the story is often tossed into the discussion when the prices of bitcoins surge up.But many pundits suggest that this a not a valid comparison. Indeed they claim that Bitcoin is more like Apple Computer or the Internet because of the array of services it offers. Others suggest that bitcoin's services could prove to be even more valuable than Apple and the Internet combined.So while tulips can be replaced with roses, vases or paintings, what exactly that they claim bitcoin offers?First, Bitcoin's near zero transaction costs could not only revolutionize international remittances but also free stores from hefty credit card fees. This offers a savings to consumers of hundreds of billions of dollars a year.Second: Money can be sent easily without the nightmares of chargebacks, credit card fraud, falsified checks and bank limits.Third: Bitcoin's unlimited and free accounts, give hi-tech financial access to the world's un-banked. Highlighted recently by a number of homeless men with a bitcoin account. This service could improve the lives of over a billion people.Finally: bitcoin offers to be the first truly un-inflatable currency in history, indeed becoming gold on steroids. New Euros, Yen and Dollars are printed daily, even gold is still being pulled out of the ground or could eventually be synthesized. But Bitcoin's limit is fixed, capping itself at 21 million total coins.Because of all of this, one recent article suggested that even wary banks could increase profits by adopting bitcoin. Hmm.While no one can predict the value of a currency, and bitcoins could still prove to be a dangerous bubble, one thing is clear if bitcoin can provide all that its technology promises, well, real services have real prices. And hundreds of billions of dollars of services could make one pretty tulip indeed.

Hello, this is James D'Angelo and welcome to the bitcoin minute.For those who follow the motto of Groucho Marx and refuse to join clubs that want you as a member, a new form of ultra-exclusivity might suit you just fine.Just like the back alley club with a confusing address, Bitcoin is a currency for insiders — with a fixed hard limit of 21 million coins.And just as bitcoin is exploding with popularity, it is also in the tail end of production. Over half of all future coins have already been put into circulation.Suddenly that 21 million limit on coins seems awfully small, especially, given that bitcoin is an international currency. Providing bitcoins for all 7 billion people on earth is simply impossible. Instead, we are looking at an average of around 1 bitcoin for every 333 people! Exclusive indeed. Yet, even this number is worse than one might think, because huge quantities of the online currency have already been snapped up by small groups and individuals.For example, just a few months ago, the Facebook twins disclosed holdings of 108,000 bitcoins. Enough for them to consider starting a fund on wall street. Worse, it has been rumored that an early investor, possibly even the founder himself, has stockpiled more than 1 million bitcoins. This total is currently worth well over a hundred million dollars, but worse, it is also one twentieth of the world's supply. Given all this, it seems likely that when the chips fall, a majority of the bitcoins will end up in very few hands indeed.

Today in a rush of press, the US-based bitcoin exchange Tradehill has suspended all trading. The company has been under fire recently as the federal regulators are cracking down on bitcoin based businesses, issuing dozens of subpoenas in recent weeks and grumbling about bitcoins usage in shading dealings.Unlike Coinbase, another US-based exchange, Tradehill is particularly vulnerable because their exchange allows you to keep a balance of US Dollars in your account as well. And for regulators, that difference is the big no no. Coinbase does things differently, filling its coffers with nothing but bitcoins opting instead to transfer dollars immediately into and out of a users traditional and FDIC approved bank. But will that keep them safe in the months of ahead?The Tradehill suspension comes just a couple months after the Federal Regulators pushed bitcoin's largest exchange Mt. Gox into temporary submission. And even after it has resumed business US Dollar payouts have been near zero.Still, the US government is smart to move slowly. Whether they like it or not, many realize that Bitcoin could signal a fundamental sea change in the way Americans interact with money. And it seems likely that whether bitcoin lives or dies, the concepts put forth by anonymous founder Satoshi Nakamoto will continue to create change in the financial sector.In fact, just this week, US regulators received a number of such cautions first hand, via the bitcoin foundation. In a closed door meeting in Washington this group of self-appointed Bitcoin aficionados made it clear that if the Federal Regulators come down too tough on bitcoin these young exchanges and businesses will likely flee to places like Germany or Canada.With the government's approval over issues of banking and privacy at an all time low, it would seem improbable that federal regulators wouldn't offer an olive branch to this fledgling currency. But rewriting the books to accommodate change is never government's best suit.And, today, of course, bitcoin is a minor player. But many believe that like travel agencies, maps, phone service, and traditional, bitcoin will replace traditional currency and in the process usher forth trillions of dollars of business. The question that remains is whether this windfall will grown in the US or set up shop overseas.

This Papa John's pizza might look like an ordinary delivery, but it seems likely to go down in history as the most expensive food of all time. And the date it was purchased, May 22nd 2010 could well mark the first shot fired in a major revolution in the history of economics. This is because this pizza was bought for bitcoins, and it is likely the first ever transaction ever made with the fledgling currency, which came to life in 2009. Further when programmer Laszlo Hanyecz ordered the pizza in Jacksonville, Florida, three years ago, he purchased it with 10,000 bitcoins. At today's exchange rate of approximately 120 dollars to one bitcoin that amounts to a current day price for the pizza of 1 million 2 hundred thousand dollars. For historians, Laszlo's initial exchange can still be seen today on the bitcoin forum. He wrote:"I'll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day. I like having left over pizza to nibble on later."It seems impossible to imagine these days, as prices for bitcoins have multiplied in value over 50 thousand times. This was recently highlighted by the bitcoin purchase of a Porsche in Austin Texas. The price here, just 300 bitcoins. Clearly, this leads us to a greater question. How far will the bitcoins value soar. An answer that no one knows. Yet some pundits suggest that bitcoins could swarm into the $60 trillion dollar international space for transactional currency. Indeed if bitcoin even grabs a 1% share of this market, its value can be calculated to climb to a phenomenal 100 thousand dollars per coin. At that point, the pizza would be worth exactly 1 billion dollars. Too much? Its not clear. Laszlo ate well that night, and launched the once abstract coin into the world for the first time as a currency.

With the Forbes online article this week interviewing Rob McEwen, once again we are given a glimpse at bitcoin's potential to unseat gold. The head of McEwen Mining and previous owner of Goldcorp, worth well over 30 billion, conceded that "it's a mistake to write off this bitcoin as a bubble or fad.." Other pundits have gone further suggesting that bitcoin is "gold on steroids."Indeed, Gold, the ancient currency was once prized for how easy it was to recognize and transport. But in this global economy, the weight of gold is now its greatest burden, like cattle its predecessor, gold is a nightmare to when it comes to sending it over the internet. Further, modern counterfeiters have challenged the most pristine aspect of gold, with many recent forgeries being crafted with Tungsten, an element with the same density as gold. In a recent case in New York, hundreds of thousand of dollars were lost to complex gold forgery.Bitcoin, like Gold, has achieved its lofty comparison mostly by its imposed scarcity, gold's greatest feature. Indeed by setting a hard limit of bitcoins at 21 million, it is seemingly even more scarce. While its possible to subdivide each bitcoin into millions of units called Satoshi's to maintain its fluidity, once the limit is reached no new coins will ever be created.Indeed as gold prices drop in recent months, one can only wonder if bitcoin, Cyprus and the internet have anything to do with the fall. And others have suggested that as bitcoin's price explodes ever higher in value, whether we are seeing the beginning of the world's first digital gold rush.That's it for the bitcoin minute. Send your suggestions and comments toThis email address is being protected from spambots. You need JavaScript enabled to view it.And we welcome all video commentary, for or against bitcoin.